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73 MLM firms operate in West Bengal

“Some firms have links with the ruling party”

While the chit fund companies under Saradha group that went bust earlier this month created a massive outrage as it affected lakhs of depositors and agents, there are 73 such multi-level marketing (MLM) firms operating in the State, according to the Ministry of Corporate Affairs.

The list of companies, against which the Centre has received complaints for indulging in Ponzi/MLM schemes, was placed before Parliament by Union Minister for Corporate Affairs Sachin Pilot on March 14 in response to a question.

The number of such firms in the State is not only the highest in the country but also several times higher than in any other State. After West Bengal, Delhi and Tamil Nadu are States with only five such firms.

With the investors and agents of Saradha group hitting the streets in protests against the firms going bust, other companies are feeling the heat. Protests were held at least at two towns in the State on Tuesday, with investors demanding that their money be returned. Some of the companies advertised in newspapers, assuring the investors not to panic.

Partha Chatterjee, Minister for Parliamentary Affairs, said after a Cabinet meeting that the inquiry commission set up by the government will also look into other such companies that indulge in unfair practices.

“Of the 73 companies listed there are some firms with which the ruling party [Trinamool Congress] has close links,” Leader of the Opposition Surya Kanta Mishra said, adding that action should be taken against all of them.

“This would ensure that investors, agents and employees of companies where such a crisis has not occurred will be forewarned,” Mr. Mishra added.

Economist Dipankar Dasgupta said lack of employment and stagnant industrial development had led to the demand for such companies where people wanted to get rich quickly and produce something out of nothing against the basic science of economics. “Those affected including the agents are either from the lower middle class or among the poor and have little understanding of such economic activities,” said Prof. Dasgupta. He added that small savings in the State had dropped because of people investing in these firms.

Of the 73 listed companies, some have close links with the Trinamool Congress: Mishra

Lack of employment and stagnant industrial development led to the demand for such companies: Dasgupta